SBI, Bank of Maharashtra, Canara Bank: PSBs jump over 4%; NIFTY PSU Bank index up 2.5%; what you need to know

The stocks jumped up to nearly 5% after the development. The NIFTY PSU Bank index was trading 2.54% higher at 7,193.95 levels. All the 12 constituents were trading in the green, with Bank of Maharashtra leading the charge.

There are about 15 subsidiaries or joint ventures of PSBs lined up for initial public offerings (IPOs) or divestment in the medium to long term, PTI reported, quoting sources.

Wherever required, banks should invest funds to scale up operations of their subsidiaries or joint ventures, the PTI report said, adding that banks can look at unlocking value at an opportune time.

As a precursor to monetisation, the report said, banks should improve governance and professional decision-making and bring in greater operational efficiency in their subsidiaries.

For example, the country's biggest lender, State Bank of India (SBI), may look at listing SBI General Insurance and SBI Payment Services in the future after they scale up their operations.

SBI General Insurance Company Ltd, incorporated on February 24, 2009, earned a profit of ₹509 crore for the financial year ended March 2025.

The general insurance arm of SBI has allotted 3,71,693 equity shares of ₹10 each during the year ended March 2025. Consequently, the stake of SBI in SBI General Insurance Company Ltd has reduced from 69.11% to 68.99%.

SBI Payment Services Pvt Ltd, which is in the merchant acquiring business, is 74% owned by SBI, and the rest with Hitachi Payment Services.

SBI Payments is one of the largest acquirers in the country, with more than 33.10 lakh merchant payment acceptance touch points as of March 31, 2024, including 13.67 lakh POS (point of sale) machines, deployed across geographies.

Meanwhile, Canara Bank has already initiated the process for the listing of the asset management joint venture Canara Robeco AMC. Besides, it is also planning a listing of its life insurance joint venture, Canara HSBC Life Insurance Company.

Canara Bank has already approved the process of diluting a 14.5% stake in its life insurance venture, Canara HSBC Life Insurance Company.

FM pushes PSU banks for credit growth

Finance Minister Nirmala Sitharaman on Friday, June 27, asked public sector banks (PSBs) to take advantage of the Reserve Bank of India's jumbo 50 basis points rate cut to increase lending toward productive sectors of the economy.

During a meeting to review the financial performance of PSBs, Sitharaman asked their chiefs to maintain profitability momentum in FY26, PTI reported, quoting sources.

Cumulative profit of 12 PSBs rose to a record ₹1.78 lakh crore in FY25, registering a growth of 26% over the previous year. The year-on-year (YoY) increase in profit in absolute terms was about ₹37,100 crore in FY25.

"According to sources, the minister expected that PSBs credit growth should improve post-50bps rate cut by RBI. Banks were also directed to try to maintain the FY25 credit growth level or increase it during the current financial year," the PTI report added.

On June 6, the RBI's six-member monetary policy committee, headed by Governor Sanjay Malhotra, lowered the benchmark repurchase or repo rate by 50 basis points to 5.5%.

Besides, the banks were also advised to work on ways to garner more low-cost deposits.

On the asset quality side, the finance minister appreciated the low level of non-performing assets in the banking sector and exuded confidence that the top management will ensure to keep it at that level.

NIFTY PSU Bank index performance

The NIFTY PSU Bank index has jumped 2.8% in the past five days (from June 23, 2025, to June 27, 2025). In the past six months, the index has rallied 7.26%, as per Google Finance.

The Nifty PSU Bank Index is designed to reflect the performance of the public sector banks.